The Pitfalls of Litigation and Pyrrhic Victories

The Pitfalls of Litigation and Pyrrhic Victories

A quick search of the family law reports of past cases will soon throw up examples where the costs of court proceedings has led to misery for the parties involved.  There are numerous instances where the costs are totally disproportionate to the assets to be divided.  I will explore a few of those cases within this blog.

There is something about being in the throes of litigation and the desire to “win” or to pursue a “principle” which can lead couples to lose sight of purpose of this hugely expensive (both emotionally and financially) process.  The aim of family law litigation is usually to reach a final outcome where this cannot be achieved by other means.  However, in many family law cases, the conclusion of the litigation does not mark the end of the relationship between the parties.  That relationship can be lifelong where children are involved. 

Disproportionate Legal Costs

The case of Piglowska v. Piglowski (1999) is a stark example of how not to litigate.  The assets were modest, just £127,400 and both parties were funded by the Legal Aid Board.  The legal costs totalled £128,000 i.e. more than the total assets so the parties were essentially left with nothing but debt – the judge in this case commented that “something has obviously gone badly wrong” which appears to be something of an understatement in this case!

In the case of KSO v MJO & Ors [2008] EWHC 3031 (Fam) out of a total asset pool of £818,416, the total costs incurred were £553,460. In the end after other adjustments only “a miserable” £217,530 was left for distribution.  The parties were then ordered to pay costs for the husband’s father who had been dragged into the proceedings and after that hearing, the litigation collapsed under the burden of the costs and the husband declared himself bankrupt.  A sad end to a case where the assets should have been sufficient to rehouse both parties.    

The more recent case of Read -v- Panzone and Anor [2019] EWCA Civ 1662 quoting Lady Justice King “This is yet another case where a highly educated couple with young children has engaged in lengthy, destructive and disproportionate legal proceedings. These disputes have continued for over five years with emotionally bruising and expensive litigation in relation to both money and the children of the marriage…The costs to date are in excess of £500,000. The only substantial asset in the case…has a net value of only £298,377…as the District Judge said… in his first instance judgment: “There is no way that the parties’ comfortable lifestyle can be maintained. Much of this has been caused by the intolerable burden of costs”.

Surely, there must be a better way to resolve the financial issues upon separation.  There is!

How can I avoid a big legal bill when getting divorced?

There are a number of ways to find solutions without involving the court or breaking the bank such as mediation, arbitration or collaborative law.  These are known as ADR or Alternative Dispute Resolution 

Collaborative Law – how it works?

The collaborative law process is about working with your spouse/partner and specially trained lawyers to find solutions that work for your family.  It is designed to avoid the upset and expense of aggressive solicitors’ correspondence or lengthy court proceedings.  By using this process, relationships can often be preserved which can be important for all involved, particularly those parenting children together.

To use the collaborative law process, you and your spouse will each choose a specialist collaborative family lawyer who will assess whether your case is suitable for this approach.  You and your lawyer will meet your partner and their lawyer to sign a special agreement which sets out the ground rules for the process and stipulates that if either of you commences court proceedings, both lawyers can no longer represent you at court so you will need to find new lawyers – this means that it is in everyone’s interests to reach an agreement.  Underpinning the process is an understanding that you and your partner (and your lawyers) will act in good faith in all of your dealings with one another and respect the fact that differences may need to be expressed to achieve a fair settlement.  Negotiations take place at “4-way meetings”, where you, your partner and both lawyers will meet to discuss the issues – you set the agenda for these meetings. 

In situations where specialist advice is needed, for example financial advice regarding mortgages or pensions, a neutral fifth party can be brought into the process and their advice is shared at a meeting where questions can be raised. 

Although the collaborative process tends to be more expensive than mediation (which is another way to resolve matters by working together with your spouse/partner) it has the advantage that your lawyer will be with you throughout the process and the costs tend to be significantly less than going to court.

Hannah Kelly
Kelly Family Law

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